What would you do in my scenario. Looking to purchase second property as investment.

[Raul Fernandez Jr]

Hi Community,

I am in a position where I can tap into the equity of my primary home to purchase a second investment property. I’m seeking guidance on how best to approach this situation and would appreciate your thoughts on what you would do if you were in my shoes.

Here are the details:

• My current home loan is $242,000, and the property is estimated to be worth approximately $420,000 (± $5,000).
• I am locked into a 30-year loan with a 2.8% interest rate, so refinancing doesn't make sense given the current high-interest rates.
• The property is rented out for $3,200 per month, while my mortgage is $2,100, and the HOA fee is $268.

I explored the option of taking out a second mortgage. Rocket Mortgage (my current lender) quoted me $100,000 for a 20-year loan at a 9% interest rate, resulting in a monthly payment of around $1,000. My plan was to use the funds from this second mortgage as a down payment (20–25%) for the next investment property with a DSCR loan.

Are there other approaches I should consider? What would you do if you were in this situation? Any guidance would be greatly appreciated!